India seeks US investments in infrastructure sector

Finance minister Pranab Mukherjee has called for increased US investments in India's infrastructure sector where the country needs heavy investments. He said there is scope of heavy investments worth $850 billion in infrastructure sector in India and it will go up to $2.7 trillion in the next five years.

He also called for cooperation in other areas, including agricultural research, health, education (including medical education and research) and insurance among others.

Addressing senior executives from financial services firms at the Institute of International Finance in Washington yesterday, Mukherjee said, India will be able to achieve a growth rate of more than 8.5 per cent in the current financial year (2010-11). The International Monetary Fund (IMF) has predicted an 8.8 per cent growth rate for India during the current financial year, he pointed out.

He also said the flow of foreign direct investment in the country has not been disturbed because of the strong fundamentals of Indian economy despite worldwide financial crisis.

India, he said, could achieve domestic savings of up to 34-36 per cent of GDP, adding that the country is well on the path of fiscal consolidation. India's fiscal deficit is expected to come down to 5.5 per cent in the current year and to 4.1 per cent by the end of fiscal 2011-12.

However, he said, the Indian economy faces the challenges of achieving fiscal consolidation and containing the high rate of inflation which has reached double digit. India also has to face the challenge of rising international prices of crude oil as the country meets 70 per cent of its demand through imports.